The European Union is working on a plan to postpone introducing tariffs on electric vehicle (EV) sales between the UK and EU. New rules of origin are due to come in from January and Maroš Šefčovič, European Commission vice-president, told the Financial Times that Brussels would interpret “made in Europe” rules very loosely in 2024.
This would give carmakers more time to switch battery sourcing from Asia to Europe, he said.
The post-Brexit Trade and Cooperation Agreement (TCA) dictates tariffs of 10% on EVs shipped between the UK and EU (both ways) if the batteries are substantially made outside the EU or the UK.
The UK government wants a three-year postponement to the changes.
The European Automobile Manufacturers’ Association said it could cost EU vehicle makers €4.3 billion ($4.5 billion) over the next three years, potentially reducing EV production by some 480,000 units, the equivalent output of two average-size auto factories.
Šefčovič said: “What is important is how you actually do the counting of the rules of origin. We are in the process of developing this methodology and building up the battery industry in Europe and in the UK so I think we have to recognise as originating in Europe any part of that battery.
Photo: European Commission vice-president Maroš Šefčovič: “Brussels will interpret ‘made in Europe’ rules very loosely in 2024.”